WORLD TRADE  
ORGANIZATION  G/SCM/N/155/VCT 
G/SCM/N/160/VCT 2 November 2007 
 
(07-4780) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
New and Full Notification Pursuant to Article XVI:1  
of the GATT 1994 and Article 25 of the Agreement  
on Subsidies and Countervailing Measures  
 
Extension Under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures  
in Document G/SCM/39  
 
 
SAINT VINCENT AND THE GRENADINES 
   The following communication, dated 1 November 2007, is being circulated at the request of 
the Delegation of Saint Vincent and the Grenadines.   
 
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  1. Title of the subsidy Programme, if relevant , or brief description or identification to be 
provided  
 
 Fiscal Incentives Act No.5 of 1982 amended by  Act 20 of 1987 and Act 16 of 1991.  This is 
an Act to provide incentives for industry at development.   
 2. Period covered by the notification
 
  As of 1 July 2006 to 30 June 2007.   
 
3. Policy objective and/or purpose of the subsidy
 
  The objective and/or purpose of the subsidy is  to stimulate, international competitiveness, 
support investment, economic activity and promote di versification in traditio nal and non – traditional 
products.   
 4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted  
  The Fiscal Incentives program finds it legal b asis in the Fiscal Incentives No.5 of 1982, 
amended by Act No.20 of 1987 and Act No. 16 of 199 1.  This was passed to Give effect to an 
agreement on the harmonization of fiscal incentives to industry among CARICOM  countries.   
  Authority
 
 
Fiscal Incentives Act No.5 of 1982 amended by 
- Act 20 of 1987 
- Act 16 of 1991 
 5. Form of subsidy (i.e., Grant. Loan, tax concession, etc)
 
 
 The Fiscal Incentives Act provides for tax concession by way of the following:   
 
- Exemption of import duties, consumption taxes on plant, equipment, Machinery, spare parts, 
raw materials, or components thereof;   
- Exemption of income tax;   
- Exemption of income tax on export profits by way of tax credits.   
 6. To whom and how the subsidy is provided (w hether to producers, exporters or others), 
through what mechanisms, whether it is fixed su m or fluctuating amount per unit and, if the 
latter, how the amount is determined)  
 
 The main beneficiaries of the Fiscal Incentives scheme are manufacturing and agro-
processing enterprises.  This incentive scheme is managed and administered by the Ministry of Telecommunications, Science, Technology and Indust ry.  Applications for the incentive benefits 
under this scheme are submitted to the aforementioned Ministry, which recommends to Cabinet the level and type of concession to be granted.   
 
 The Fiscal Incentives Act No.5 of 1982, as am ended by Act No.20 of 1987 and Act. No.16 
of 1991, allows for the granting of tax holidays fo r the manufacture of approved products by approved 
enterprises and can be classified into  five (5) categories as follows:   
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  I. Group I Enterprises, up to 15 years, in which local value added is 50 per cent or 
more of sales;   
 II. Group II Enterprises, up to 12 years, in which local value added is between 25 per 
cent and 50 per cent;   
III. Group 111 Enterprise, up to 10 years, in which local value added is between 10 per 
cent and 25 per cent;   
IV. Enclave Enterprises, up to 15 years, in which production is exclusively for export;  
and 
V. Capital Intensive Enterprises, up to 15 years, in there is an investment of not less 
than US$25 million.   
  The Act provides for income tax relief in the form of tax credits to enterprises once the tax 
holiday period has expired.  This is contingent on exportation and is granted on export profits of an 
enterprise accruing from its exports  of the approved products.   
 
 Relief is provided for non – traditional exports to all countries; however, in the case of 
exports to Guyana, Jamaica and Trinidad and Toba go, the period of relief is only for five years 
immediately following the expiration of the tax holid ay period.  Relief is granted if export profits 
amount to ten per cent or more of the entire of the enterprise in accordance with the following:   
 
Amount of export profits expressed as 
a percentage of the entire profits Maximum percentage 
of tax relief 
10% or more but lass than 21% 5% 
21% or more but less than 41% 35% 
41% or more but less than 61% 45% 
61% or more 50% 
  Export profits are determined by the following formula:   
    (E*P)/S 
 
 Where 
 
 E represents proceeds from export sales, 
 P represents profits made by the enterprise, and 
 S represents the proceeds of all sales.   
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy (indicative, if possible,  the average subsidy per unit in the previous 
year).  Where provision of the per unit subsidy information (for the year covered by the 
notification, for the previous year or both) is not possible, a full explanation  
 
 The level of subsidies granted under the Fi scal Incentives Act in 2006 was EC$5,936,064.96, 
respectively.    8. Duration of the subsidy and/or any other time limits attached to it including date of 
inception/commencement  
 
 Please see "6" above.   
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  9. Statistical data permitting an assessment of the trade effects of the subsidy.  The Specific 
nature and scope of such statistics is left t the judgment of the Members.  To the extent 
possible, relevant and/or determinable, however it is desirable that such information includes 
statistics of production, consumption, imports  and subsidized product(s) or sector(s)  
 
a) For the three most recent years for which statistics are available;   
b) For a previous representative year, which,  where possible and meaningful, should be 
the latest year preceding the introduction of the subsidy or preceding the last major change in the subsidy.   
 
Year Total Imports (EC$ ) Total Exports (EC$) 
2006 726,977,001 102,889,568 
 
 Please note that these figures represent total exports for the period.   
 
Year Total Exports by Firms Benefiting From Fiscal Incentives 
(EC$) 
2006 24,592,918.76 
 
  
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